The Problem Of Procurement Cost Control In GLM Agricultural Machinery Co. LTD. And The Countermeasures

Nowadays,with the development of economic globalization,agriculturalmachinery manufacturing industry is the rapid integration into the global productionsystem. With the national vigorously promotion of agricultural modernization, thecompetition between enterprises of agricultural machinery becomes more and morefiercely.GLM agriculture machinery corp. operators are facing huge challenges in thefierce competition in the market. Each enterprise the co, the enterprise whose cost isless will win in the price competition, thus effectively reducing the cost become therealistic problem of an enterprise urgently to solve. According to the survey analysis,it is showed that purchasing cost occupies the50%above of cost. The most effectiveway to reduce the enterprise cost is to control purchasing cost through theprocurement cost effective, so as to achieve the purpose of reducing the cost ofenterprise. In the face of such fierce competition in the market situation, it is veryimport to occupy the enterprise cost proportion of high procurement cost in order toseek development in the fierce competition environment to enhance companycompetition ability undoubtedly. But the concept of many enterprises on purchasingcost control is not clear, More enterprises consider how to decrease cost from theenterprise itself perspective with the implementation of the process of purchasing costcontrol, rarely consider the interests of the whole supply chain, lack of mutualwin-win idea.Through investigation and study,it is found that GLM Agriculture MachineryCorp has been established for many years but there are still many problems in theprocurement cost control, resulting products produced by GLM company arerelatively weak in price competition of the market at present. GLM a AgricultureMachinery Corp mainly uses the order production, so the enterprise lackeffective forecasting for the supplier selection demand, the enterprise usually need arrange purchase work after the receipt of customer’s order，so the cycle ofpurchase is short， to purchase demand goods and the amount of purchase isrelatively small. so when especially parts demand become large, there is notenough the time to choose suppliers, and there is no time to carry on theeffective price negotiations with suppliers, so that purchasing parts prices is veryhigh, the quality is not good, also did not issue a series of perfect after sale serviceand technology, which leads to the high purchase cost, it appears that some sellproducts whose repair costs are high soon come back to repair,In order to solve a series of problems above and improve the marketcompetitiveness of products of GLM company, First of all the paper starts with theanalysis of the macro Background environment of purchasing cost control on thecurrent current agricultura lmachinery enterprises and at the same time discusses theothers problema in comnination with various theories of purchasing cost control,such as TCO of the total cost composition, supplier selection and management,purchasing process and process control, procurement cost control method etc. Onthis basis of procurement cost calculation of GLM agriculture machinery companyfor the nearly three years from2011, the paper analyze detailed and effectivelythe composition of the purchase cost of the enterprises for standing in the angle ofthe TCO total cost. The paper proposed GLM company’s current purchasing costcontrol issues, combining the actual situation of GLM company analyzed proposedthe suggestions and solutions for GLM agriculture machinery corp. onthe purchasing process, supplier management, procurement cost control methodselection by various related theories.